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peachy and danny
Joined: 04 Aug 2009
Posts: 16
Location: Not in Sacramento
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 Posted: Sat Oct 15, 2011 2:50 am Post subject: Question about my student loans... |
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| I am an American who is having trouble contacting the government institution handling my federal student loans. Their new website is faulty and confusing, and their phone number is never answered. I'll continue to try to contact them. At any rate, I am thinking of defaulting on those loans. I am never returning to the United States to live, anyway. Can collection agents do anything to me over here in Japan? It seems that all of their written consequences pertain to those living within the United States... |
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It's Scary!
Joined: 17 Apr 2011
Posts: 823
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| Posted: Sat Oct 15, 2011 2:57 am Post subject: Re: Question about my student loans... |
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| peachy and danny wrote: |
| I am an American who is having trouble contacting the government institution handling my federal student loans. Their new website is faulty and confusing, and their phone number is never answered. I'll continue to try to contact them. At any rate, I am thinking of defaulting on those loans. I am never returning to the United States to live, anyway. Can collection agents do anything to me over here in Japan? It seems that all of their written consequences pertain to those living within the United States... |
They will threaten, but no, they are entirely toothless. You're lucky that you're in Japan in the age of the internet! When I was there facing student loan problems, there was no internet and my bank was routing everything through the Danish post through Copenhagen, making all of my loan payments past due to their cheapness. Apparently, they had cheap bulk post rate in the early 90's.
My response to them when they threatened me in the Middle East in the mid-90's was to give them the sage advice of "If you point a gun at someone, make damned sure that you've got bullets in it".
But, no, there is nothing that they can do.
It's your decision to default or not! |
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Inflames
Joined: 02 Apr 2006
Posts: 486
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| Posted: Sat Oct 15, 2011 4:33 am Post subject: Re: Question about my student loans... |
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| It's Scary! wrote: |
They will threaten, but no, they are entirely toothless.
But, no, there is nothing that they can do.
It's your decision to default or not! |
This is terrible advice. For one, student loans never go away in the US. If the OP goes back and starts working in the US odds are their salary will be garnished rather quickly. If the OP works in Japan and returns to the US to retire the government will simply take part of their Social Security payments. If they send money home the government can take that as well. Not to mention your credit will be shot, so there's very little chance of getting an apartment (or even a phone) without putting up a huge deposit (which you won't be able to do, as the government will just seize the cash).
Numerous universities refuse to issue transcripts (or any records) to people who have defaulted on their loans.
The other thing is that they can come to Japan and sue you, if they wanted to (I've heard of it happening in Europe). Moreover (they don't do it now) they could decide to deny passports to people with substantial delinquent Federal debt.
There's also the problem of saying that one will never go back to the US - it's easy to say but hard to make it true. Even if you don't want to you might still be forced back. In addition, there's the 10 year ICR (income contingent repayment) plan for people - this means that your payments depend on your income and, at the end, the remaining amount disappears. I knew a ton of people here who had trouble paying $200 or $250 each month for their loans - not because of any financial difficulty but rather that they hadn't even tried to pay them off. |
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deadzenpoet
Joined: 06 Aug 2010
Posts: 71
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| Posted: Sat Oct 15, 2011 5:26 am Post subject: |
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Just stay in forbearance or deferment the rest of your life and run up the interest!
It's easy!  |
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Vince
Joined: 05 May 2003
Posts: 559
Location: U.S.
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| Posted: Sat Oct 15, 2011 4:31 pm Post subject: |
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If I may ask, why are you considering default?
I applied for two forbearances when I was in Japan and paid the interest via personal check. When my loans weren't in forbearance, I sent payments via international postal money order. It might seem a little burdensome the first couple of times, but after that you'll be able to fill out that form in your sleep.
I'm surprised you're unable to contact them. I'm sure the alumni office at your school can help. This is probably wasted advice, because it seems you're not really interested in contacting them.
Back to defaulting - it's simply wrong. Those lenders paid for you to receive a service, and you received it. That degree is surely prominent on your resume and an important qualification for your current job. If you default, will you stop claiming your degree?
Inflames is right. Do you know that student loans can't be discharged in bankruptcy? That's how high of a priority the US government puts on them. If you default, your home country and many of its services will be off limits to you. You might think now that you're willing to deal with that, but you don't know what your future holds. You also never know if some future agreement between the US and Japan could result in Japan collecting for the US, or deporting you. |
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G Cthulhu
Joined: 07 Feb 2003
Posts: 1373
Location: Way, way off course.
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| Posted: Sat Oct 15, 2011 5:04 pm Post subject: Re: Question about my student loans... |
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| It's Scary! wrote: |
| peachy and danny wrote: |
| At any rate, I am thinking of defaulting on those loans. I am never returning to the United States to live, anyway. Can collection agents do anything to me over here in Japan? It seems that all of their written consequences pertain to those living within the United States... |
They will threaten, but no, they are entirely toothless. |
Not true.
OP signed an undertaking that if they were loaned the money they would pay it back, so they're morally on the negative side for choosing to default in the first place.
Secondly, the US-Japan tax treaty is still in effect and the OP will, as a US citizen, be required to file tax returns while outside the US. Beyond all that, the FedLoan people can and do track down and garnish wages internationally. The odds are against it in any particular instance, but they do do it and IMO Japan is probably one of the most cooperative countries for helping them in that.
US loan obligations aren't exactly extreme anyway. It's a pretty cheap move to dodge the loans while in Japan, earning a Japanese wage, especially with the exchange rate as it is at the moment. The OP could, at the very least, have the loans put into deferment while they're outside the US.
Simply opting to default because they think they can is an amazingly dumb move all around. |
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peachy and danny
Joined: 04 Aug 2009
Posts: 16
Location: Not in Sacramento
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| Posted: Sun Oct 16, 2011 11:51 am Post subject: |
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| Vince wrote: |
If I may ask, why are you considering default?
I applied for two forbearances when I was in Japan and paid the interest via personal check. When my loans weren't in forbearance, I sent payments via international postal money order. It might seem a little burdensome the first couple of times, but after that you'll be able to fill out that form in your sleep.
I'm surprised you're unable to contact them. I'm sure the alumni office at your school can help. This is probably wasted advice, because it seems you're not really interested in contacting them.
Back to defaulting - it's simply wrong. Those lenders paid for you to receive a service, and you received it. That degree is surely prominent on your resume and an important qualification for your current job. If you default, will you stop claiming your degree?
Inflames is right. Do you know that student loans can't be discharged in bankruptcy? That's how high of a priority the US government puts on them. If you default, your home country and many of its services will be off limits to you. You might think now that you're willing to deal with that, but you don't know what your future holds. You also never know if some future agreement between the US and Japan could result in Japan collecting for the US, or deporting you. |
First of all, I stated in my original post why I am considering defaulting - can't you read? I am having trouble CONTACTING them. Their phone line is never answered, their website (where I've paid before) isn't working, and they don't return my emails. Seems like they aren't as interested in me paying back my loans as I am. Secondly, I didn't ask for you or anyone else's moralizing. I am perfectly willing to pay them back. However, I will not bend over backwards for them. If they want their money back from me, then at the very least, they can provide a working website for me to PAY them. |
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peachy and danny
Joined: 04 Aug 2009
Posts: 16
Location: Not in Sacramento
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| Posted: Sun Oct 16, 2011 12:05 pm Post subject: Re: Question about my student loans... |
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| Secondly, the US-Japan tax treaty is still in effect and the OP will, as a US citizen, be required to file tax returns while outside the US. |
I thought I only have to pay taxes to the American government if I make more than 200,000 dollars a year. Is that incorrect? Also, how can anyone garnish my wages if I get paid in cash? |
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Inflames
Joined: 02 Apr 2006
Posts: 486
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| Posted: Sun Oct 16, 2011 3:02 pm Post subject: Re: Question about my student loans... |
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| peachy and danny wrote: |
| Quote: |
| Secondly, the US-Japan tax treaty is still in effect and the OP will, as a US citizen, be required to file tax returns while outside the US. |
I thought I only have to pay taxes to the American government if I make more than 200,000 dollars a year. Is that incorrect? Also, how can anyone garnish my wages if I get paid in cash? |
If you live abroad and file your taxes promptly you don't have to pay taxes (if you don't file you lose the exclusion and have to pay taxes). If you make more than around $90,000 you have to pay taxes as well.
They might not be able to garnish your wages but they almost certainly can go after your bank account! |
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Vince
Joined: 05 May 2003
Posts: 559
Location: U.S.
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| Posted: Sun Oct 16, 2011 4:23 pm Post subject: |
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It wasn't clear that the lack of contact was your reason for considering default. It sounded more like you were considering it because you believed you were beyond their reach. That's why some of us replied with our "moralizing." I'm glad you clarified your intentions.
Again, contact your alma mater for help. If for some odd reason they can't contact the lender for you, ask them to put a note about it in your file. I doubt it would go that far, because your school will most likely put you in contact with them. It's not about doing the lender's legwork for them, but about protecting yourself from a lifelong burden. |
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Glenski
Joined: 15 Jan 2003
Posts: 12844
Location: Hokkaido, JAPAN
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| Posted: Sun Oct 16, 2011 10:01 pm Post subject: |
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| Americans have to file taxes no matter where they live (unless they have some abominably low income). They have to pay taxes on money earned abroad if that money is over whatever the figure is for that year (roughly $90,000 this past tax year, as Inflames wrote). They have to pay taxes on their other income from the U.S. as usual even if they live abroad. |
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